A number of foreclosure mediation bills introduced in California in recent months await consideration and votes by the State legislature. Californian lawmakers previously adopted sweeping reform of the State’s foreclosure process in Senate Bill (SB) 1137, including certain communications required between the mortgage servicer and borrower to determine the financial situation and explore foreclosure alternatives before a notice of default may be filed. Many of the bills awaiting attention amend that existing legislation. Assembly Bill (AB) 1588, introduced in September 2009, would add to foreclosure legislation already passed in the State by establishing the Monitored Mortgage Workout (MMW) Program. The Program would be administered by the California Housing Finance Agency, and would give borrowers an opportunity to explore foreclosure alternatives. The bill would prohibit further foreclosure action until the borrower completes participation in the Program. It’s similar to AB 1639, last amended in March 2010, that establishes the Mediated Mortgage Workout (MMW) Program to help borrowers and lenders develop a modification plan. A Governor-appointed and State Senate-confirmed administrator would lead the program, which would require participating borrowers to deposit half the current mortgage payment each month to the Program administrator. The bill would also prohibit lenders and servicers from reporting a negative credit event if the borrower completes the MMW Program and accepts a mortgage modification. Additionally, SB 931, introduced on February 2, prohibits a deficiency judgment on a note secured by a first lien when the borrower sells the house for less than the remaining mortgage due, as long as the first lien holder gives prior written consent. The lien holder can then accept all proceeds from the sale as full payment of the debt, and discharge the remaining debt. AB 2024, introduced Feb. 17, would require lenders to notify borrowers of specific reasons a loan modification request is rejected. SB 1221, introduced Feb. 18, would amend existing timelines for a lender to file a notice of sale. The bill would require lenders to send the notice of sale no less than 85 — instead of the current three months — days after filing the notice of default. SB 1427, introduced Feb. 19, would require a notice of default to identify the contact information and name of any person or entity designated to maintain the property in foreclosure. AB 2325, introduced the same day, expands the scope of parties considered as “foreclosure consultants.” The bill would qualify as a foreclosure consultant anyone arranging or attempting to arrange an audit of an obligation secured by a lien on a residence in foreclosure. Therefore, anyone arranging or attempting to arrange such an audit would first be required to register with the Department of Justice and become certified to do business as a foreclosure consultant. Also introduced Feb. 19, SB 1275 would add to existing law that requires servicers to — until Jan. 1, 2013 — contact a borrower to assess his or her financial situation and explore foreclosure avoidance options before filing a notice of default. The bill would add to that and require a servicer to provide the borrower with an application for loan modification and other foreclosure alternatives, as well as a notice on the borrower’s rights during the foreclosure process. AB 2653 would expand existing law that requires the transfer of mortgage servicing rights be reported in writing to the borrower. The bill adds that when the ownership of a mortgage is transferred, the party acquiring ownership must provide, at the borrower’s written request, the price paid for the debt. Additionally, AB 2347 would express an intent of the legislature to pass legislation that ensures notices of default filed on multifamily properties would be delivered to the secondary mortgage lender when that lender is also a public entity. Write to Diana Golobay.